2018 Fall Conference Rewind Daily Highlights

 

Key Takeaway: The Sector Achieves top Rankings, but we Cannot Depend on Demographics

Moderator Beth Burnham Mace lead an all-female panel in a frank discussion of the sector’s appeal to investors, both with a historic perspective, and a look ahead. Brenda Bacon, President and CEO of Brandywine Living, addressing occupancy rate challenges, remarked that we can’t depend on demographics alone to solve problems, and that the sector will have to pay higher wages in the future. Beth Burnham Mace, NIC’s Chief Economist & Director of Outreach, pointed out that the sector is achieving top rankings among commercial real estate classes. She remarked that the simple fact that the 2018 NIC Fall Conference is the biggest conference in NIC history is an indicator of the sector’s growing appeal to investors.

Key Takeaway: Invest in People and Profit

In a tight labor market, seniors housing and care operators are focused on how to recruit and retain good workers .In fact, the industry will need to fill 1.1 million jobs by 2025, according to Brent Weil, vice president-workforce development, Argentum, who moderated a session, “Investing in People.” The panel discussed best practices at the afternoon session. Research shows a strong correlation between trust in the workplace and employee turnover. A community with high worker engagement has higher occupancies. In fact, a 10 percent increase in employee retention can increase occupancy by two percent. Panelists mapped out the details of successful apprentice programs, including partnerships with state agencies. “We develop people and allow them to grow professionally,” said Todd Schmiedeler, senior vice president, Trilogy Health Services.

 

Key Takeaway: Every Market is Unique – Occupancy and Penetration Rates do not Correlate

“Supply and Demand in the Dawn of the Silver Tsunami” began with an appeal from Moderator Beth Burnham Mace to replace “Tsunami,” and its negative connotations, with the word “wave” instead. After setting the stage with a brief presentation of NIC Map market performance data, discussion kicked off with a comparative analysis of three distinct markets and their varied occupancy trends, supply and demand patterns and penetration rates. Data shows that, surprisingly, occupancy and penetration rates do not correlate. Dan Lindh, President and CEO of Presbyterian Homes & Services, gave a detailed overview of his company’s approach to the Minneapolis market. Likewise, Bre Grubbs, Senior Vice President – New Business for Leisure Care, broke down the dynamics of the fastest growing city of the last decade – Seattle. Susannah Myerson provided insight on another type of market, in Phoenix, remarking that each market is unique, and to compare penetration rates without understanding local dynamics is similar to comparing home prices without considering the values in different markets.

 

Key Takeaway: Abundant Capital is Keeping Property Prices High

Capital is driving valuations in the seniors housing and care market, according to a panel of experts at a session on valuations. Investors are willing to pay high prices for properties based on future cash flows despite declining occupancy rates. The panel said a number of factors will impact pricing going forward, including rising interest rates and the increasing cost of labor. Nearly 80 percent of the session’s audience thought the abundance of capital is making acquisitions pricier and riskier. Another significant risk is what the consumer will want in 10 years. Panel moderator Steve Monroe asked: How long does it take for pricing to align with fundamentals over the long term?

Don’t miss tomorrow’s 8 a.m. opening session with keynote speaker Gary Cohn, former Director of the U.S. National Economic Council. His insider insights will be followed by a full day of educational programming, and the provocative NIC Talks.

 

Key Takeaway: Capital Carefully Picks Its Battles

A panel of investors mapped out strategies at a session on global capital flows. They’re in it for the long term and find themselves competing for the best operators amid concerns about oversupply and labor issues. “The next two years will be a time of asset management,” said Steve Blazejewski of PGIM.

What’s the best capital structure? Owners and investors weighed in noting the shift from triple-net leases to RIDEA and JV partnership structures. Lower occupancies are making traditional leases less viable. All agree that the interests of the operator and the owner/lender must be aligned.

Financing decisions aren’t always as clear cut as they might seem. The audience got two out of four decisions right at a session on how best to finance different projects in a rising cap rate environment. Session panelists walked the audience through the four case studies and then the audience voted on how they would finance the deal. Bottom line: It’s still a good time to be a borrower.

 

Peer to Peer—Market Underwriting

Participants in the peer-to-peer session on market underwriting exchanged ideas about supply and demand. They worry about the supply of new construction but noted that it really depends on the individual market. There’s a need to rebrand senior housing and present the product in a different way for baby boomers. The customer is not just the senior, it’s the adult child and especially the adult daughter.

 

Key Takeaway: Hire for Culture and Then for Skill: You Can’t Train Attitude

Peer-to-peer salons facilitated small group discussions on some of the most pressing issues facing the seniors housing and care sector today, from labor challenges to increasing penetration rates and underwriting markets.

 

Key Takeaway: People Don’t Want Boxes Where People Grow Old Any More

In a discussion on understanding Baby Boomers, Tim Carpenter, CEO & Founder of EngAGE, said that isolation is the elephant in the room. The architects on the panel advocated for open spaces, community involvement and the idea that aging should be cool.

 

Key Takeaway: Change is Coming, on Many Fronts

Susan Dentzer explained how healthcare in the home is superior to sending seniors to the hospital. Lisa Marsh Ryerson discussed the impact of isolation. She suggested we reimagine the role of your activities director or volunteer coordinator, saying, “I want you to think of this role as purpose matchmaker.” Mobile strategist Chetan Sharma explained how tech will advance more in the next ten years than in the past 100. Finally, Chinwe Onyeagoro presented data on the business value of creating a great workplace experience for employees.

Tomorrow join us as we wrap up the 2018 NIC Fall Conference. We have three educational sessions and “Innovations that Work,” a new rapid-fire format on the latest technology solutions. See you there!

 

Key Takeaway: Innovations That Work are Making a Difference

Based on a “lightning talks” format, presenters shared their success stories while synced to 22 slides, automatically advanced every 22 seconds, for a total of only seven minutes and 20 seconds each.

Jayne Keller showed how her “Keepers Committee” reduced staff turnover from 43% to 19% by bringing staff and residents together. Tim Reilly’s recently launched Arena software initiative is promising to improve retention by predicting success factors during the recruiting process. Paul Liistro walked through a technology that enables real-time patient assessments, while the Curatess system is dramatically reducing ER visits and lowering costs for Allen Pindell’s company. Phil Fogg introduced Vynca, which migrates end of life planning to the cloud, helping ensure its accessed when and where it is needed, an issue that profoundly impacts many seniors, including his own mother. The final presentation, given by Allan Fox, demonstrated how smart camera technology is reducing falls, lowering ER visits and reducing exposure to lawsuits, among other benefits.

 

Key Takeaway: Operations Are Key to Success

Two sessions highlighted the importance of operations and strategic planning to create a culture that drives success. The session, “Benefits of Scale” brought together three growth-oriented operators: small, regional and national. Clusters of properties have a branding and management advantage, participants agreed. But the top ingredient for success is a laser-like focus on the individual community, its employees and residents. The session, “Thriving in Skilled Nursing” took a positive look at opportunities in the sector with a quick round-robin approach. Bottom line: CMS five-star quality ratings mean different things in different places; reimbursement changes coming next fall will impact revenue; operators need to partner with other types of providers and connect with the wider community. “Skilled nursing will come out as the best and cheapest game in town,” said Steven Littlehale, PointRight.

 

Key Takeaway: NIC Talks—Connection Matters

Kelly Leonard, of Chicago’s famed Second City, gave an emotionally impactful talk on the use of improvisational skills to connect with dementia patients. Another, more technologically focused form of connection is AI-enabled voice technology, which hundreds of millions are now experiencing in their phones, home devices – and their kitchen appliances. Bret Kinsella believes the power of voice technology will make a real difference for seniors and their care givers. Closing out the final session of the conference was Dwayne Clarke, who shared how his company connects with employees, winning Best Places to Work awards while achieving impressive recruiting and retention goals.

 

Thanks again for attending the Fall Conference. Join us for the 2019 NIC Spring Conference: Investing in Seniors Housing and Healthcare Collaboration. It will be held in San Diego, February 20-22, 2019. The Spring Conference is designed to help stakeholders navigate the disruptive change taking place in the sector to better serve America’s elders in the years ahead. We look forward to seeing you there.